Skip to main content

tv   Countdown  Bloomberg  May 21, 2015 1:00am-3:01am EDT

1:00 am
anna: china's manufacturing effortforts stay sluggish. we are in hong kong with market reaction. mark: the fed reserve signals it is unlikely to raise interest rates in june, but leaves the door open for tightening later this year. we growth dampens their tone. manus: deutsche bank -- there will be one leaving the strategy overhaul at germany's biggest bank lender ahead of its general meeting. could be a shareholder slowdown. anna: a summit in paris. we are live with exclusive
1:01 am
interviews as leaders tackle issues surrounding climate change. >> it is now or never. it is not too late, but almost too late. mark: and ecb gives emergency cash for greek banks. tempers flare. creditors ahead of the meeting -- ♪ mark: welcome to "countdown." i'm mark barton. >> i'm anna edwards. >> i'm manus cranny. cvs is said to be in advanced talks to buy on me -- omnicare. anna: let's bring you up to
1:02 am
speed with what has been happening in the asian markets. we have a look at the chinese manufacturing numbers, which remain sluggish. good morning. it slipped to a 13 month low. what is behind those numbers? >> i think it is worth noting is it is the initial gauge that comes out for the third week of the month. the final hsbc reading -- we got contraction. lower than expectations. another thing to note is it is a private survey. smaller in scope. less companies. it is where the pain is being felt the most. you look at what the shanghai composite has done so far.
1:03 am
4500. this is when the data came out. these levels are more or less. very close to that. let me show you what is happening. people have been following this rally. take a look at this. this site is not spelled out completely. look at this bubble right here. one week interbank rate. we are down substantially. 195. we were closer to 5%. all of these easing measures and rate cuts, you had some siskel support coming through as well -- fiscal support coming through
1:04 am
as well. so far, it hasn't seeped into headline numbers. it doesn't mean demand will pick up the money that is available. anna: david, talk about what is happening on the stock market. there has been bold activity taking place. one yesterday. what is happening? david: funny moves. fairly extreme. yesterday we had a solar company. loss $19 million of its value over the course of 20 minutes. today we have is a group of companies. let me get it up for you. there you go. down 46%. the reason we are watching this yet this group and another down roughly 50%. two best-performing stocks
1:05 am
completely wiped out with the morning session. we don't know a lot. we don't know why this is happening. it is something to watch closely. stocks are getting pummeled and jumping off a cliff. i will keep you updated. anna: thank you. david ingles in hong kong. mark: the climate summit. putting pressure on companies. bloomberg took a look at what is behind the push. shareholders demand for action on the environment. at least 14 energy companies are facing resolutions in sustainability policy. it is part of a record push to raise concern about how
1:06 am
executives are handling climate change. environment base resolutions erect 88%. with shareholders are raising their voices? why energy companies? there are growing concerns surrounding the burning of fossil fuel. investors want to make sure it management meets the mission reduction goals. governments are cracking down as well. protecting the environment is becoming more of an investment risk. management is now listening. the companies agreed to shareholders demands on
1:07 am
environmental action. mark: let's get to francine. what can we expect from this summit? francine: good morning. we have more than 1000 executives gathered as we discuss how to tackle climate change. we're not expecting any concrete action or details. this shows this shift from an industry that was quite skeptic in general. for example, cosmetics. industries want to focus on climate change. the shift has turned. there has been more investor pressure. we caught up with a ceo. he was talking us through some of the issues. he believes now is the right time to act.
1:08 am
>> it is clear all of them can make huge progress. we are not heavy carbon. we committed six years ago. we have achieved it one year before. we are committing to reducing it by 60% and maybe go further. the results come quickly. >> packaging is something you have to grapple with. >> packaging would be part of
1:09 am
the global commitment. i think it is pretty unique. it would be -- what does it mean? it means that every product on the market will have to demonstrate and we will demonstrate that it has -- it makes a difference. packaging is definitely a large part of that. either formula or packaging. we are making progress on both sites. >> water is something you use a lot for products. that is something i guess you're focusing on also. >> absolutely. the first side is we have
1:10 am
committed to reducing gas emission. we are committed to reducing 60% our use of water. we are also working because it is important in our business to find a solution so that consumers could use less water when using our product. a typical example is shampoo. when you shampoo your hair -- depending on how much hair you have -- [laughter] -- you general use five or seven liters of water. we are working on formulas in the chilling need to use when leader. that makes a -- one -- in which you would only need to use one liter. that would be very important. francine: it is a difference
1:11 am
when you sell millions of products. he says he will go further. we don't have an industry level details of how they will combat lucian boy up to hear more throughout -- call that solution, but we hope to hear more. the french president hopes we'll get the first agreement on gas emissions for all countries around the world. coming up, great interviews. i will speak with at least five ceos. i will speak to the side arabian oil minister -- saudi arabia oil minister. mark: thank you. that was france serene -- francine lacqua. manus: deutsche bank and today's general meeting their co-chief
1:12 am
executive will take up the reins for a niche energy. shareholders showed up. hans nichols is in frankfurt. it is all showdown at the deutsche bank. talk this through the changes. hans: there appears to be more power for the co-ceo. it took over the strategy and operational unit. he was the cfo. he will no longer be the cfo. if you takes over -- he takes over the operations of the non-core unit. this doesn't seem to be getting a whole lot. there are some musical chairs
1:13 am
and some departures. here's what we have. we have the co-ceo of asia-pacific. never another who is the -- we have another. and another -- this big strategy review by deutsche bank may have to trim some losses. a cost-cutting plan. they changed their target plan. they wanted 12%. they want to make it 10%. remember the last quarter. 3.9%. they did have a good last quarter, but they also had that $2.5 billion headed do with the industry. this is a bank that will be facing their shareholders today. we'll see how contentious it is. manus: hans, they will say that face tough challenges from some of the big shareholders.
1:14 am
what do you think today's meeting will be? open confrontation? hans: expect there to be a fair amount of heat. he mentioned a slowdown. this could be a long process. we could get the vote later on this evening. we will see how deep this opposition is. last night, there was an advisory group who announced their opposition. they control about 5% of its whole -- shareholders. this is what we heard from them. we formally express our strong concern about a range of issues and our lack of confidence in that management board. lack of confidence. they joined -- they had concerns about the legal issues. we have two big groups that are
1:15 am
potentially owing to draw their members along and oppose this leadership. we don't know how much actual support is out there and whether or not this will be cosmetic. >>manus: i suppose it is one of those ironic moments. opportunity of a lifetime or a poisoned chalice? anna: breaking news. we talked to david at the top of the hour with movement in the hong kong share prices. a chairman says he is confident that two companies -- operations are normal. financials are stable. the search goes on for a reason to explain why those two businesses have seen share prices plunge more than 60% in hong kong trading. this is following yesterday's unexplained plunge.
1:16 am
interesting news in hong kong. we will look for more details. anna: federal reserve officials signaled they are unlikely to raise interest rates in june. the minutes of the april meeting showed the central bank is leaving open the auction of tightening later in the year. the fed expect growth to pick up after stalling come even as officials worry about spending. anna: six of the world biggest banks will be paying and five agree to plead guilty to charges tied to a currency probe. they agree to plea guilty of conspiring to manipulate the price of u.s. dollars and euros. a settlement was announced in washington yesterday. anna: the biggest u.s. retailer of prescription drugs, cvs, is in talks. that is according to people with knowledge of the matter.
1:17 am
they are still finalizing terms of the deal. no deal is certain. anna: george osborne has said to save by 2017. speaking at last night's dinner the u.k. template emphasize the importance of business. >> backing business is not about abstract economic policy. jobs and opportunity for the working people of britain. others predicted unemployment would -- it was you who created the new jobs. anna: and bloomberg tv will bring you for coverage of george osborne's delivery of the latest u.k. budget. anna: u.k. prime minister david cameron's administration is preparing new laws to punish illegal workers and step up duplication -- step up
1:18 am
duplication -- step up deportation. mark: join the conversation on twitter. tell us what you are following today. manus: let's remind you of today's diary. preliminary index figures from markets. 8 a.m. london time. then it is over to germany at 8:30 a.m. and figures for the eurozone at 9 a.m. anna: coming up, the fed. stay with us on "countdown." ♪
1:19 am
1:20 am
1:21 am
mark: the federal reserve says it is unlikely to raise interest rates in june while leaving open the option of tightening later. let's discuss this and other key economic news with our guest who is a chief economist. good morning. june seems to be off the cards.
1:22 am
does that make september the favorite? philip: we think september is the favor. -- favorite. june has been off the cards for a while. in the words of several fed reserve officials, the economic situation is murky. we haven't really emerged for them to start heartening -- tightening. we have had a couple of signs of economic activity, nothing that convincing. on the plus side, we have had better news from housing. sales have disappointed. with any luck we'll have enough clarity. anna: what is the weakness in consumer driven parts of the economy? what do you put that down to?
1:23 am
are they emotionally scarred from the financial crisis? is the consumer a different beast? philip: i don't think it's that different. the reduction of gas has put money into their pockets -- what it should have been. it's not exactly clear. most consumer confidence numbers have been strong. over the first four months of the year, generally it has been strong. there is a big debate at the moment as to whether the first quarter economic data is accurate. the adjustment officials used to see the variations is accurate. even the feds have an internal debate.
1:24 am
they disagree. it is possible something technical going on. we cannot be sure. manus: it were not sure what is happening in the u.s., china has numbers this morning. still contracting. should we be worried? philip: i think we should be concerned certainly. the pmi certainly went below the 50 level. i'm not sure that indicates manufacturing has contracted. it is have a big growing less than normal. manus: right. philip: it is not a given the chinese authorities will get their gdp target. manus: does that feed into the stagnation argument? do you worry about that?
1:25 am
is that what we're looking at? philip: at least half-full. not three quarters full. for example, the u.s., banks are supplying credit. things are more capital constraints and liquidity constrained because of regulations. we are a different world. absolutely. manus: larry summers -- it dropped out of my head. mark: looking ahead to today's eurozone data, the citigroup economic index has drifted lower since its peak in march. meaning unbalanced. it is a minus figure. the data has been slowly
1:26 am
declining. is that cause for concern? philip: yes. you have to watch what is going on carefully. it is gauged -- expectations has been pushed up. if you try to look at an absolute gauge, the more you will see you had that first rise in gdp for about four years. you are seeing a gentle pickup. will that continue? we suspected it probably will. it is still competitive. anna: philip, thank you for
1:27 am
much. manus: coming up, cvs in talks to buy omnicare. stay with us. ♪
1:28 am
1:29 am
1:30 am
yeah manus: looking back to "countdown." the market wasn't that short. easy street. my summation is that the spirit is willing but the body is weak. there is still a great deal of doubt on the ability of the american economy to handle higher rates. td wrote that the threshold to
1:31 am
raise rates is very low but the bias is high. concerns about greece china. they didn't spend the dollars and that is not playing the game according to the federal reserve. 95.41 is where we are. the euro. you are just paring back your losses. let's show you the overall momentum. you can see the -- bloomberg does the analytics a lot better than i do. go through that level and you will seat stop losses take you down to about 1.1066.
1:32 am
break that level and you are off and running to the 50 day moving average of 1.0927. also bloomberg have done a great piece this morning saying the bond market route is over. the bearish bets on bonds to bullish bets on bonds is narrowing. i will pop those numbers out later elan -- later on on twitter. mark: the federal reserve unlikely to raise interest rates in june. the minutes of their meeting show they are open to the option of tightening later in the year.
1:33 am
chinese manufacturing missed its estimate, the preliminary number comes in at 49.1. the number is underscoring the lukewarm response to a slowdown. shares of gold plunged more than 60% in hong kong trading earlier. the trouble follows a mysterious 47% lunch yesterday which wiped out $19 billion in market value before it was suspended in the trading remains suspended today. and a girl the european central bank improves -- approves the smallest rise and tensions are high between alexis tsipras and
1:34 am
the nation's creditors. let's go to hans nichols who has been following the ongoing greek drama. what is it the greek banks get from the emergency liquidity assistance? good news for a little while. hans: it may be good news if you think the ecb did this because that is how much they thought the greek banks needed to the number is 200 million euros. earlier we reported that what they actually wanted was 1.1 billion euros. so this increase is on the small side and won't give them much breathing room. on the other side, there wasn't a decision made on what sort of haircuts to impose on collateral. there was a great deal of discussion and yesterday there was a long and intense discussion on just what they were going to do about collateral and they decided not
1:35 am
to take that move. with the current rules you can see up to 95 billion in ela. if you change the rules, you shrink it quite a bit. even if the bank keeps raising the ceiling they will run out of runway once there is adequate capital in greece. anna: tell us a little bit about the progress being made. they said yesterday the real progress was being made, what are the current sticking points in terms of negotiating a deal? hans: it looks like there is this big holdup on tension reform. creditors are really pushing for greece to reform their pension system. that may mean there could be a little bit of again on labor market reform and increasing the minimum wage. mr. tsipras and madame merkel me
1:36 am
tonight at that summit. one of the things to note is that mr. tsipras does intend to implement a new sales tax proposal after his first one was not passing muster. it could be a late night. anna: thank you very much. live in frankfurt. manus: a deal is almost done in the u.s. pharmaceutical sector with cvs health getting close to buying omnicare. caroline: let's check in on what these companies are. cvs is the number one retailer of prescription drugs in the united states. omnicare is a nursing home provider and pharmacy. $9 billion is how much omnicare has as a market valuation so
1:37 am
interesting to see what the price tag will be but we understand the deal could be struck as quickly as this week. omnicare shares rallying on the back of the news they jumped almost 9%. they put themselves up for sale earlier this year loring what their options were working with bank of america and these partners to explore options, one of which included a sale. what about pharmacy benefits? pharmacy benefit management is in vote. it is a real theme building in the m&a space. we have so much desire to manage your costs that we are seeing fuel for demand in companies that manage that for you. basically they help clients and companies and individuals get
1:38 am
discounts from drugmakers for very expensive medicine. the demand has really been ramping up. this is actually fueling the consolidation we are seeing. they're all trying to get a bigger piece of this growing pie. when you look at cvs, it is already a key player within pharmacy services. they handle drug plans for health insurance and the employers and it is their fastest growing unit which is why they want to make the acquisition. if you dig into it we are seeing not only interest coming from cvs but also express scripts. march, unitedhealth group bought catamaran for $12.8 billion. right eight did a deal -- rite
1:39 am
aide did a deal earlier this year. and of course express scripts built itself up by m&a three years ago. keep an eye on this particular space. manus: thank you for that roundup. anna: you can join in the conversation with us on twitter. mark: coming right up 28 eu leaders will be meeting later this evening and the focus will be on two of them. angela merkel and alexis tsipras. stay with us for analysis on the prospect of a deal.
1:40 am
1:41 am
1:42 am
mark: european leaders gather in riga today for the eastern on a ship summit. the government in germany telling bloomberg that chancellor merkel may week with tsipras at the summit but it is unlikely to be the setting for a deal. good morning and thank you for joining us today. >> pleasure. mark: are we likely to get any semblance of a deal or not? guest: not at all i think.
1:43 am
in the best case scenario tsipras movie tells merkel can help if he does his own work. in the worst-case scenario he will be told by merkel and the other leaders that unless they start moving quickly greece will be given a take or leave deal. certainly not a normal deal coming out today. mark: what would it take or leave deal look like? merkel has essentially said you have until the end of the month so explain what that deal might look like? guest: i think i take or leave deal would look like the conditionality's they need to meet to conclude the review. there would be a fiscal component it would be about labor. that is the risk the greeks are running here not only violate
1:44 am
being subjected to all of those are west but they fail to come out with plausible alternatives. if you cannot come up with alternatives when time is running short you will have to take whatever they are willing to offer. mark: what is the eu most hopeful on, the sales tax pensions which one might we get a deal on? it seems that tsipras's handed in vat proposal has been handed back. where does the hope lie when it comes to specific issues? guest: i think on the vap front a deal is likely. on the rate i think there will be some movement. on pensions, they can offer to
1:45 am
cap some of the loopholes but they are not willing to do more than that. on the labor front there is not much at all that tsipras wants to offer. it feels very far from a deal and meanwhile the clock is ticking. mark: it seems that greece once a two-stage pact. they want this deal to unlock liquidity and secondly they want this comprehensive long-term agreement this winter which would obviously help their financing and there would be some kind of debt restructuring as part of that. do you see that as palatable to the creditors or not? guest: the goal from there creditors point of view is to conclude existing review. they will tell you it goes back to december.
1:46 am
that is a priority. [inaudible] then we can start talking about a new program. will the new program and tail immediate get relief -- and entail immediate debt relief? i don't think so. no debt relief in the pipeline anytime soon. mark: does greece have enough money to pay off the imf in june? guest: there are four payments and the total is 1.5 billion. they might have enough money to do the first payment on the fifth of june, everything else at this point is up in the air. it would be very difficult without some help from the creditors to meet the other three payments for the rest of the month not to mention
1:47 am
salaries and pensions at the end of june. mark: do you think that ecb will continue to feed liquidity to greek banks and the ela continued its handouts yesterday although the figure was the lowest since january. could that ecb make the ultimate political act and pull liquidity or would that the too big a statement? guest: that is a nuclear option. as long as the talks are continuing, we so have the program and the extension goes until the end of june and the ecb will continue to provide liquidity. at this point pushing the nuclear button is far too early. it's not just a technical decision by the ecb. mark: thank you, the director of research. manus: top stories on bloomberg
1:48 am
at this hour. the u.k. prime minister david cameron will pledge to reduce immigration. his conservative administration is preparing new laws to punish illegal workers, step up deportations. he is set to speak in a few hours before he travels to riga. islamic state militants seized control of a city in northern syria home to one of their most tactical sites. it contains the ruins of a 2000-year-old city. it was one of the more's -- most important cultural centers of the ancient world. al qaeda founder all some of bin laden remain committed to attacking the u.s. even as he struggled -- osama bin laden
1:49 am
remained committed to attacking the u.s. even as he struggled to maintain control. the documents were uncovered when they stormed his palace in pakistan and killed him. anna: coming up we will look at our favorite stories from bloomberg's digital our. -- digital hour. ♪
1:50 am
1:51 am
1:52 am
mark: leaders gather in paris to discuss issues in corporate and climate change. there have always been trade-offs. one company is trying to tackle that by using solar power and send. -- sand. >> son and sand, key elements usually associated with a beach holiday. this italian company has other ideas -- energy. >> with the wind farms you only have energy when it is windy and solar only with son. with this technology you can concentrate the energy into one receive and use it when the sun doesn't stride. -- shine. >> it works just like solar handles except this has the ability to save the energy in
1:53 am
sand when it is stark. -- when it is dark. in turn produces steam to power turbine. even when the sun goes down, the sand remains hot enough to produce electricity for another six hours. >> we have 270 tons of sand stored inside the receiver. as soon as the sun goes down it can continue for another six hours. >> it can produce enough energy to power a small town. the company behind it has put 10 million euros into it and it is still only in its early stages. with italy producing more solar energy than anyone else in europe and requests coming from across the world the investment could well worth it. and a girl -- on a girl --
1:54 am
anna: a couple of stories to kick off a football related theme. visa is telling the global soccer body that they have grave concern. not the first time visa has spoken out against fee for about things it does not -- fee for -- fifa. mark: the election is next friday and i will be there. for candidates but he is favored to win his fifth term at the three other candidates could be coming together. to will drop out and they will support the other one. watch out for that.
1:55 am
manus: spotify will take on apple and youtube. and rather than waffle through the five things you need to know, let's look at this. >> hey guys. today, we are introducing a new spotify experience. to build new types of content, including non-music content. >> what a perfect marriage to put audio content on one of the best audio platforms in the world, spotify, in pursuit of making video content and spotify is jumping into this world and the audience that you guys have is the perfect thing to do. >> we are thrilled to be here on the launch date for the new spotify platform. we want to watch those clips. we are the demo and we love the demo. we are talking about our clips
1:56 am
and how they will slide right in their. they are short clips people can watch in the middle of the day. >> your phone already has sensors built in that can detect how you move. spotify can take the information, figure out your pace and find the track that matches the beat of your feet even between songs. >> there is an incredible opportunity to soundtrack your entire day and life in all of its complexity and we are taking a huge leap ahead to give it to you. manus: this is when it gets scary. that your ipod or whatever will decide your mood. anna: sometimes i rely on the music to keep my feet going. if the music slows to speed of my feet we might lose quickly. manus: apple have tried a variety of things, so no guarantee that they will when --
1:57 am
win. mark: will speak to a ceo shortly after 7:00. ♪
1:58 am
1:59 am
2:00 am
anna: china's manufacturing output slips despite attempts to cushion the slowdown. we are live in hong kong with the reaction. mark: the federal reserve unlikely to raise interest rates in june. weaker growth and consumer spending dampen the tone. manus: [inaudible] ahead of the annual general meeting where executives could face a shareholder showdown. anna: the business summit gets live in harris as leaders tackle issues surrounding climate
2:01 am
change. >> i think all have understood that it is now or never. before it is too late. mark: welcome to "countdown." manus: coming up america's biggest retailer of prescription drugs, cbs health, is said to be looking to buy on the care. anna: we are waiting for numbers from the national grid. the full-year return on equity. a final dividend of 28.16 pence. a lot of focus around many of these utilities. the focus when it comes to dividend. no doubt of interest to many who
2:02 am
invest. fully operating profit at 3.8 6 billion pounds and profit before tax 2.8 8 billion. excluding timing or any variation up by 5%. getting these numbers through from the business as we speak. stephen holiday joins us now for his first interview of the day to help us get to the bottom of what is happening at the business. thank you for joining us. let's get through the overall story. the dividend tell us your latest thinking on where it goes. guest: i think you hit it on the head. operating profits last year are up at 3.9 billion pounds earning set 2.2 billion pounds. we have had a strong financial year and we have invested 3.5
2:03 am
billion pounds in our businesses and the u.k. and in fact in the u.s. a record $2.4 billion of investment last year. in the u.s. they are really sing the benefit of enhanced reliability. in the night in the united kingdom, the new form of regulation doing enormous innovation as well as generating return to investors. any benefits are shared with customers. we are announcing 2 million pounds of savings are going back to customers. the other announced that we laid in the past few months was to build more interconnect are's between the u.k. and belgium and norway and those are big investments that will bring customers to the u.k.. is been a strong year but we have a strong performance in the future as well.
2:04 am
the dividend will continue to grow in line with inflation year on year. anna: you say in the statement today that effective regulation continues to drive efficient investment. it seems very good that a business speaks so fondly of regulators. what is it the regulators are getting right. guest: it is an interesting word. this arrangement was a very challenging two-year stressful. to get the right framework in place. they clearly need financing. the clever form of regulation in the u.k., being looked at by many the world over incentivize is us to deliver every output for customs at the lowest possible cost. if we can get a weight without going something in the benefits are shared equally with
2:05 am
consumers it is causing enormous change and innovation and we're working hard to earn our returns and we are bringing benefits through to customers so it is regulation. and a girl it a bit similar to the old one but a new parliament. the glover -- government here is still shaping the queen's speech. with renewable energy and the overall u.k. energy next, what would your thoughts the on where we need to head in the next five years >> stability you have seen clearly in many sectors. it has been absolutely clear in the energy sector for two years. we the u.k. need to build a lot more power generation than we have. the new energy bill that came through under the last government starts to incentivize renewable energy sticking with
2:06 am
that policy and making sure investors can see it is consistent year on year is what we as customers need in the u.k.. we need stable regulation. to build more power generation investors need the confidence that the policy will be stable and their year on year. anna: one of the things that you have been testing are these capacity market auctions. can you give us any thoughts on the latest we are hearing from austin. they have opened an investigation to see if they generated false or misleading information to some of their proposed generating units. does this cast into doubt the success of these options, can you give us your reaction at all? guest: what it should do for all of us is have some assurance
2:07 am
that often will continue to audit and check with everything that goes on through these processes. i hope that these two -- that these checks continue year on year. it is an administrative task that we perform. we will be instructed by the government at some stage of 2015 to run the second set of auctions. anna: thank you for joining us. mark: let's move the attention to germany. let's move the attention to china actually. manufacturing missing estimates today. slipping to a 13 month low. bloomberg's david england's is in hong kong. what is behind the myths?
2:08 am
reporter: what economists have been saying and this comes down to the numbers, 49.1. clearly still in contraction. this current easing cycle, or all of these targeted measures they haven't really shown up yet. i will show you a bit later that it has shown up when it comes to the money markets. you take a look at the shanghai composite. this is what it did today with an hour or so left. where 1% higher for today obviously. it really has come to a point similar to what we have seen over the last 12 to 18 months
2:09 am
where bad news in the economy is almost good news when it comes to the market. we will get more support from the central bank or the fiscal side on the government. the money market rates in china, was a bit of a worry about a year ago but apart from a three rate cut in the cuts in the reserve ratio requirement that has really pushed up the stock market. these circles right here. but when it comes to the money market that has also driven down the cost of borrowing. the question is when does this seat through into the headline data. economists are saying a supply of credit is here but it doesn't mean that demand will necessarily pick up. it doesn't mean when the money is there that the demand will necessarily follow.
2:10 am
mark: take us through japan. reporter: you have a market that is continuing to rise, right now we are just about closing and coming off four days of gains. just about closing up shop. we started strong and we were going for a fifth day of gains with profit-taking profit at an eight year high. boj started its hollis he today. economists don't expect any court of change when it comes to the policy stand this time around. but anything after that is anybody's guess. at this point to get the same
2:11 am
amount of efficacy on their policies and has to be a surprise. watch out for that this time tomorrow. mark: david ingles in hong kong. manus: after the lender announced last night that the co-chief executive would take up the reins for the new strategy overhaul. last month's moves to boost return has not impressed investors in germany's biggest lender could see a slowdown. all morning i have struggled with this between slow down and showdown. will it be a hoedown? hans: that is because you know it could be a long night. we could end up having this late in the evening. late last night jane is taking over a little bit more power. he is the co-ceo.
2:12 am
he gets the strategy and operational unit. stephan crouse was the cfo and was stepping down there and he will take over non-core operational units. that was the unit that juergen fisher was responsible for. there are a little bit of musical chairs and a few departures. there is the co-ceo of asia-pacific and the ceo for the united kingdom. a big departure there and the head of private and is this client division. uni talked about this on numerous occasions. the backdrop all of this is the strategy review they completed and they change there are a week target. remember what they did in the last quarter and they want to trim 3.5 billion in costs. we don't know where that will come from yet and then hanging
2:13 am
over this are the legal issues. they did agree to pay 2.5 billion u.s. dollars to settle some of those whites. so we have the shareholder meeting today and i suspect some opinions will be aired. i don't know if there will be hoedown. it doesn't quite seem frankfurt for me but you may know a different side of frankfurt than i do. manus: they don't do hoedown's like they used to anymore. let's talk about this group of institutional investors. they want something different, who are they, what do they want and how loud and vocal will they be? hans: the ones that are opposed will be vocal and loud. here is a statement that hermes -- they control 5%. here is a statement put out late last night with this negative vote
2:14 am
against the board. we vote formally to express our strong concerns about a range of issues and our lack of confidence in the management board. that is hans christoph. they join isf, we don't know what percentage they will be at. shareholders meetings here in germany typically go a long time and most of the questions technically need to be answered and eventually we will have a vote and see how it comes down. manus what will be speaking to the very group. you do not want to miss that interview. what are his objections to the current program and leadership at deutsche bank and a girl
2:15 am
federal reserve officials signal that they are unlikely to raise interest rates in june though minutes show the central bank is leading with the office tightening later in the year. the fed expects growth to pick up after stalling. even in officials worried about consumer spending. six of the world's biggest banks will pay $5.8 billion in i've agreed to plead guilty to charges. j.p. morgan chase sparking down to plead guilty to felony charges before conspiring to an affiliate the price of u.s. dollars and euros. the biggest u.s. retailer of prescription jogs is in advanced talks to require under thing home. that companies are still finalizing the terms of the deal and no agreement is certain. george osborne has told the u.k.
2:16 am
government to find further cuts to save 13 billion pounds by 2017. speaking at the confederation of dinner, the chancellor emphasize the importance of backing is this. >> it is not about abstract economic policy is about backing those who find the jobs for the where the people of britain. when others predicted it was rockets it was you who created the 2 million new jobs. anna: july 8 bloomberg bring you the full coverage. david cameron will pledge to reduce immigration this morning. they are preparing new laws that punish illegal workers, step up deportation and tax foreign criminals. mark: on the conversation on
2:17 am
twitter and tell us what you think of the show. the fed intimating that there won't be a rate hike in june. trending today. manus point will bring you more news. coming up with francine lacqua.
2:18 am
2:19 am
mark: corporate and state leaders head to paris today for the business climate summit. it kicks off amid increasing pressure. let's go to francine lacqua. what can we expect from the
2:20 am
summit? reporter: here of course from a lot of the executives, thousands are here at the business climate. yesterday we were hearing from the business climate and this is all ahead in the crucial climate talks at the end of the year where we are hoping to have a target on the whole. if you look at the industry's the largest company for waste and water treatments of course they will benefit from any kind of official targets worldwide. >> we have two sorts. the cities and the industries. we are working for all of them. we achieve the problem of using more and more oil. you need 20 times more water.
2:21 am
in scarcity regions, they could not do themselves these oil companies. it is a bit more technical. there we have a role to play. to reuse the water. also without new wells, to boost an old well you need more water to have the same quantity of oil or gas. reporter: can i ask you about recycled goods? lower prices, a problem? >> prices are declining. between the year 2000 and the year 2013 the price has
2:22 am
declined by three times. the trend of oil is increasing. from new emerging countries. if we are declining at the last months, the future will see higher prices. much higher demand. we see the west becoming progressively the biggest mining of the world. these should become resources for all of the developing country industries. reporter: of course we do not have a target from business leaders of what they want to be achieved because if you break it down it will be different industry by industry. a water and waste management company will benefit from any kind of climate change
2:23 am
agreement. other industries such as oil and gas they say is not a hindrance that it may mean more costs if you capture it. later today i will be speaking to the saudi oil minister and i will be interesting to see house he sees it playing out area if we are going to reduce carbon in missions than a lot of analysts say 80% of discovered fossil fuel will have to remain in the ground. that will be one of my main questions for him. mark: looking forward to it. we will see you later today. anna: european central bank approved the smallest rise in emergency cash for greek lenders. tensions are high ahead of the meeting in latvia. let's get the hans nichols who has been following this ongoing saga. what does a greek bank get from
2:24 am
the emergency liquidity system? hans: they got another 200 million euros. it was around 80 billion before. the request from the greek bank came in at 1.1 billion euros. they didn't get that much breathing room and at the same time they did not make the decision to add more haircuts to the collateral they will be accepting. at least on the collateral front , the greek banks got a bit more legroom and landing space. in terms of how much actual ela they get, we will see what the request is for next week or whether or not they are in any sort of bailout program. you will see political pressure at the reagan summit when on the low merkel and mr. tsipras meet later today. anna: it was said yesterday that
2:25 am
there is real progress being made, what are the current sticking points? some revolver on pension and labor law, what are the current issues? hans: we have consistently heard from not just berlin but brussels and madrid as well. greece needs to reform their pension program and that continues to be a sticking point. creditors really want to see movement on pension reform. that may indicate the could be a little bit of give on labor market reform. probably not back to pre-2012 crisis levels but a slight increase or a different schedule on labor and the minimum wage increase. from mr. tsipras's side he has ignored that their current sales tax proposal isn't going to pass muster. he may give that to creditors later on in riga today.
2:26 am
it was pretty clear yesterday that almost everyone ruled it out and next week is a possibility. june 5 is a dropdead deadline. 305 million euros are due to the imf and green has been clear they will not be able to pay. manus: let's remind you of the diary ahead of us. preliminary pmi figures. first up is france, then germany at 8:30 and finally around up of all that eurozone figures at 9:00 a.m.. mark: cameron's immigration promise. more on his pledge to amp up deportations. ♪
2:27 am
2:28 am
2:29 am
2:30 am
manus: after the -- change at the dollar. it is up 18. my wrapup of the minutes, the spirit was willing but the body was unable. the fed essentially saw the dollar's strength is being a great -- drag on growth for some time. looking at the overall trend and you have to say, the fed sounds
2:31 am
as if they are stepping back from that june moment of raising rates. i love what td wrote overnight. the threshold to raise rates is very low but the bias is incredibly high. the dollar over the past 30 days is down 2.5%. when it comes to the euro, we are paring back we've had a nice run on the downside. paring back the first weekly loss april. we have broken through an important level. 1.1100. that is the level or stop losses would come in. if this level gives it is all guns blazing down to the 50 day moving average.
2:32 am
the ability of this market is really on stop losses around 1.1066 level and your target after that will be 1.0927. did i make up these levels? no. anna: let's get some breaking news on tesco's. a little more detail coming through from them in their annual report in what has been or could be awarded to other senior executives. saying they will seek recovery of their former ceo's pay if gross misconduct is proven. the former ceo clark who left the business, you will remember at the height of that accounting scandal that led to substantial financial losses or penalties for the business.
2:33 am
the determination payment was 1.2 2 million pounds. they are saying there was no additional payment, a bit more detail on the current management as well. his total remuneration at 4.1 million pounds and alan stewart 2.3 million. mark: the federal reserve officials unlikely to raise interest rates in june. the minister from that april meeting shows they are leaving open the option of tightening later this year. the fed expects growth to pick up after stalling even as consumers worry about spending. a 13 month low. the preliminary number from hsbc came in at 49.14 may. the number underscores the lukewarm response. shares of gold in financial and
2:34 am
golding properties plunged 60% in hong kong trading earlier. gold in shares 42% lower and and properties down by 38%. it wipes $19 billion in market value before they suspended trading. you can find more on that story at /europe. manus: david cameron expected to make pledges to punish illegal workers step up deportations for over sayers. sonja joins us now. this has all the hallmarks that came back to haunt him as a policy promise in 2010 which he did not deliver on. give us the background.
2:35 am
reporter: immigration is always the toxic topic for any politician. david cameron is well aware that he almost lost a lot of voters to ukip. any poll shows is still an issue for many voters. he missed that hundred thousand target and many the time said it was unachievable so he is now taking a different approach. introducing smaller measures but it is still big talk and big hitting which gives the signal that he does care. anna: stepping away from it being a target and more of a general pledge. george osborne spoke to the cbi yesterday. did you give any clues in his speech? he will bring forward an emergency budget. july 8 is the date. reporter: what he has done is asked government departments to find extra savings by july so he
2:36 am
can stand up and say i promised 13 billion and cuts but i will deliver them in targeted manner. what he is also going to do is give us more detail on the extra funding and how it will be delivered. mark: he also chatted about productivity. that has puzzled many an economist. reporter: he said he will address it. how he will achieve that remains to be seen. he will focus on improving productivity. he will have a vote on a few measures about and lamenting broadband. the productivity puzzle has been the big question hanging over the u.k. economy. at the end of the day it is going to affect growth performance. anna: a lot have been talking
2:37 am
about it for so long but it will be a focus and he has made some key appointments people who are on the same page with him in the need to invest in the future. reporter: he has jim o'neill on board and another, two very key allies. jim o'neill focusing on the northern powerhouse which is key to this. trying to move growth from outside london to other regions of business. manus: july 8, bloomberg tv will bring you full and live coverage of george osborne's delivery of the u.k. budget. anna: a deal is almost done in the u.s. pharmaceutical sector with cvs health getting close to buying omnicare. caroline: we're discussing all things pharmaceuticals.
2:38 am
that is where the money is pouring. cbs close to a deal with omnicare. omnicare helps nursing homes manage their patients. it is on the block for $9 billion. it put itself up for sale a couple months ago just to assess what it ought about its future. a sale was one of them and had interested buyers. we could see a deal reached as soon as this week. they were up almost 9% in trading yesterday. clearly this is about expansion and getting into pharmaceutical services. they're driving a lot of m&a in the united states and it is all about benefit management. some pharmaceuticals are costly and as we can see, when we look into what the catalysts are for
2:39 am
the deal and it is all about helping clients extract discounts from drug companies for expensive medicine which is slowly going to bring up the next slide. it is all about demand for these services. desire to manage the costs are fueling m&a in this sector. they are all wanting to drive down overall costs of expensive drugs and this is what pharmacy benefit management does. discounts on expensive drugs from the pharmaceutical companies. interestingly, we are seeing consolidation to let these companies get a bigger share of the pie. already, cvs is the second biggest benefits manager. it is the fastest growing bit of the business. we are seeing already not just
2:40 am
cvs we have already seen express scripts. the number one pet player already looking at on the care. but it actually had a raft of deals in the past few months. unitedhealth group bought catamaran for $12.8 million. building up their experience and prowess in the airy a pharmacy in a fits. right aid also made a deal of $2 billion and it seems to be more to come. manus: thank you very much. join us on twitter. carolinas there, i am there, on a and mark -- anna and mark. things are ready -- rather saucy this morning in terms of what this one rabbi is putting. anna: every word i was going to
2:41 am
say it was inappropriate. there will be some viewership on the west side. mark: up next it is the bart chart. what is the best-performing stock this year? ♪
2:42 am
2:43 am
mark: what is the world best-performing stock in 2015? i am talking about developed markets. i am using the world index as my reference point, which includes all developed markets not emerging markets. 1006 or 31 members. -- 1631 members. the number one market is pharmacyclics. its shares have left 112%.
2:44 am
the stock started the year at $122 and $.51. that is the far left hand corner. finished yesterday at $278.72. you can see that the stock has barely moved since march. m&a, agreeing to buy this company right here. eating out johnson & johnson. that equates to $261.25 per share. the blockbuster blood cancer therapy. an easy-to-use pill that costs $100,000 per year and avoids serious side effects of chemotherapy and has proved for different blood cancer uses. for the record, the second best-performing stock in the world?
2:45 am
lt's. they agreed to by the second biggest u.s. cable company and the third best performing stock in the world is netflix. an 82% surge and very quickly the worst performing developed market stock this year bombard ea -- bombardier. slumped by 38% this year's. the bulk of that drop, where i circled it right there, that was january 15 where the stock fell by 26%. after the company halted work on the learjet 85 is this aircraft which was already a year behind schedule. since then they brought in a new
2:46 am
chief executive and replaced the head of its businesses. the forthcoming c-series commercial jet is more than two years late and $2 billion over budget. i have to admit that the sharp shares have also dropped to 38% this year. there you have it, the best performing stock the worst performing stocks in 2015. manus: let's go to the top stories this hour. david cameron will pledge to reduce immigration this morning. his conservative immigration is preparing new laws to punish illegal workers and tax or and criminals. he is set to speak in a few hours before he travels to riga for his first meeting with fellow european leaders since winning the election. islamic state militants seized could -- seized control of palm
2:47 am
iera. it contains the ruins of a 2000-year-old cities that was one of the most important cultural centers of the ancient world. they began an offensive about a week ago. al qaeda's founder osama bin laden remained committed to plotting attacks on the u.s. as he struggled to control followers. he wanted to build on young islamic caliphate. the documents were captured when u.s. forces stormed his hideout and killed him in 2011. anna: just a few minutes to go until the london markets opened up but let's get some analysis. chris joins us. on the back of mark's excellent bart chart about m&a and the
2:48 am
ailing -- the things that ail bombaridier, are any of these businesses on your radar at the moment? things you fancy or don't like the look of? guest: for the european markets in particular we have had an impact shock with the reality of qe coming through. the first part of q1 was about realigning expectations about what that was going to do. what we have seen happening more recently is the started going back and looking at individual equality. a drop in correlation. much more stock specific as we ended the quarter. the quality factors the m&a opportunities became more evident. what has happened since the middle of last week when we had impetus to the qe story again
2:49 am
from europe and the ecb guidance toward more bond buying and stabilization we are back on track to say the markets are moving higher in europe and that liquidity is still being maintained. we are not stock specific right now and to that extent good quality companies are rising generally. but if you have good quality stock your risk is very low because there will not be that out of left field impact of an announcement. what people are doing is following the broadly rising momentum. they are narrowing down quality names to manage their risk as opposed to putting overlays on futures. mark: what is a good quality stock? guest: we would point to something in the chemical sector.
2:50 am
bayer. they are a company we would certainly be focusing back on here. yet the quality product pipeline everyone is familiar with but also it is an environment. input costs and realignment of expectations. they are generally giving solid support and that would be an example of a stock that we would revisit in opportunities like we see now. we are telling people to go back and look at stocks. you can always go back to companies like that. mark: explained it valuation system for our viewers. guest: we look at what the current share price tells us and that is by looking at what the expectations are in relation to the company. future growth of earnings, sales, value, we align those actors.
2:51 am
when the market is properly priced we can work out what it is you are paying for. and when you have a discount or premium what that valuation is. that is when you get missed valuation opportunities. it is a straightforward reality check. every date we can say is it improving or declining? in order to invest me to trade in those going sideways or alling and it is only when you can get those missed valuations that we really step up and say here is an opportunity. making money in equities is all about timing opportunities as opposed to long-term investment planning. so you would look at the stocks that you like and say every day is there an opportunity to adjust my exposure. is there an opportunity to add to my position. very often, what we do is talk
2:52 am
to investors and say now it is time to step up and add this position or equally to say you need to be scaling out of this because the valuation has gone too far too quickly. it is the risk versus the valuation trend. manus: you are keen to upgrade your position in health and banks. but you are not mad about you and heritage. if consumers are getting better and things are feeling explained that justification. guest: the first point on the sector work as we look at the stock 600 19 sectors there and the balance of risk and return. the sale down recently saw defense is coming and now they're moving back toward more consumer friendly stocks. in reality that is a higher to
2:53 am
play. defensive stocks by their definition are part of the portfolio that we're balancing risk and uncertainty about. as it reduces people are stepping up more on that cyclicals. banks and health care are now beginning to move and the momentum suggests people are starting to dip their toes in. we would be more focused right now on the chemicals and the auto sector. we put out a by note on see it -- fiat recently. we are looking at the consumer sector in general. not necessarily retail but what you're getting is at the situation isn't getting any worse and there are some extensions out there. slightly higher leveraged names are those that i think between now and the end of q2, it is
2:54 am
something that investors are focusing on those relative terms. they will move back to a cyclical name and though sectors will be pushing back. anna: and for the media stocks you have some advertising to the and publishing stocks, how does that fit into concerns about slowness in the developed markets. guest: the names we have been talking to clients about recently making impulsive cases four. there was a possible concern that maybe the u.s. was slowing and a concerned that u.k. growth in q1 wasn't quite what it was you have the french gdp numbers and the german gdp numbers. and if you listen to the advertising industry generally, the demand is out there. this is the trade-off. there is always a reason to buy growth opportunities particularly when valuation opportunities are expected.
2:55 am
in relative terms we have had that reset. people forget that when qe kicked off they were looking at historic multiples before interest rates were effectively zero. what we are now seeing is a step up in terms of valuations being held by the interest rate. anna: thank you very much. manus: let's just remind you of what is on the data diary. purging -- purchasing managers index throw the morning. france at 8:00 a.m.. then the focus is on germany where some of the indicators have been settling back slightly at 8:30. then finally the eurozone roundabout at 9:00 a.m. mark: equities set to open and 4.5 minutes. the focus today will probably be
2:56 am
on the fed. suggesting a june hike. anna: "on the move" is up next. talking about budget bank. see you tonight.
2:57 am
2:58 am
2:59 am
jonathan: good morning and welcome to "on the move." we are moments away from the start of european trading, so much to talk about this morning. a big day for data. hsbc's gauge a chinese manufacturing is staying for a third straight month. top hong kong stocks drop like stones. yesterday a billion dollar company lost almost half of its value in an hour. strategy shakeup. deutsche bank is giving a ceo
3:00 am
direct oversight to strategy. the agm kicks off today, i will be bringing you a representative of some of the institutions. i am looking at futures 50 futures down. dax futures up for it -- dax futures up. manus: china's numbers are disappointing, should we be worried about the contagion? according to larry summers, equity markets are lower. we have had a conversation with specter dynamics. they believe no


info Stream Only

Uploaded by TV Archive on